JP Morgan Pushes For Crypto Regulation After Recent SEC Crackdown

After the recent SEC lawsuits on crypto exchanges, US banking giant JP Morgan is making its voice heard by asking the US government to regulate the crypto ecosystem. According to the bank, the risk is to an industry that processes billions of dollars exit to other markets outside the United States.

JP Morgan vs. The SEC

JP Morgan doesn’t seem to have taken lightly the recent legal action by the SEC against crypto platforms, hence asking the government for dedicated regulation in the ecosystem. This has led to the largest bank with a market capitalization of $413 billion, backing the crypto industry towards a US-centric future.

Following the SEC’s attack on crypto firms, including Binance and Coinbase, the need to establish a legislative framework to prevent a flight of crypto capital abroad has emerged. In a recent report released after what happened to the crypto firms, JP Morgan has asserted that it has become urgent to develop:

a comprehensive framework on how to regulate the crypto ecosystem and the relative responsibilities of the SEC vs. the Commodity Futures Trading Commission (CTFC)

Further, the team of financial analysts headed by the bank’s managing counsel, Nikolaos Panigirtzoglou, has argued that:

It is not easy to decree with absolute certainty which cryptocurrencies fall under the nomenclature of “security,” which is used in SEC lawsuits.

Various crypto exchanges and service providers on US soil have backed out, fearing a legal punitive expedition. Some of them include Robinhood, EToro, Crypto.com, among others.

Binance and Coinbase, on the other hand, which have better resources and legal means than the other competitors, have forcibly imposed themselves by asking the courts to hear their arguments, by rejecting the SEC’s charges.

However, the court seems to have given the crypto industry a point, having rejected a request by Gary Gensler (SECs chairperson) to freeze the assets held by Binance.US.

Will SEC Chair Evade Expulsion?

Various crypto enthusiasts have expressed their opposition by calling for the expulsion of Gary Gensler from his role as the SEC chairperson. Some include two US Representatives, Warren Davidson and Tom Emmer, who formally submitted an act to the House dubbed the “SEC Stabilization ACT,” calling for the person’s dismissal and reform of the entire federal agency.

In a statement, Warren Davidson noted:

US Capital markets must be protected from tyrannical Chairman, including the current one.

On the other hand, Emmer reportedly called the SEC chair ‘’a regulator in bad faith,’’ highlighting the contradictions of his actions in the common interest of investors.

In addition to reforming the commission, the proposed bill is set to create the conditions for a departure of the political sphere from the regulatory one. This is by preventing any party from having a majority on the commission and adding the executive director position.

It is with no doubt that the pressure on the Chairman of the SEC is getting increasingly intense as the days go by. The SEC chair has been forced to review his actions due to the failure to handle the $8 billion financial crash in FTX last year.

However, following his counter-response, Gensler was put in the spotlight again after it emerged that he had a history of being a candidate for compliance at Binance. There has been speculation recently that the SEC chairman triggered this whole mess just to retaliate for the rejection of ChangPeng Zhao (CZ), the CEO of the giant platform. The white collar has been cornered and can no longer commit missteps if he wants to save his tenure.

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